| Accountancy NCERT Notes, Solutions and Extra Q & A (Class 11th & 12th) | |||||||||||||||||||
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| 11th | 12th | ||||||||||||||||||
| Class 12th Chapters | ||
|---|---|---|
| Accountancy - Not-for-Profit Organisation | ||
| 1. Accounting For Not-For-Profit Organisation | 2. Accounting For Partnership : Basic Concepts | 3. Reconstitution Of A Partnership Firm – Admission Of A Partner |
| 4. Reconstitution Of A Partnership Firm – Retirement/Death Of A Partner | 5. Dissolution Of Partnership Firm | |
| Accountancy - Company Accounts and Analysis of Financial Statements | ||
| 1. Accounting For Share Capital | 2. Issue And Redemption Of Debentures | 3. Financial Statements Of A Company |
| 4. Analysis Of Financial Statements | 5. Accounting Ratios | 6. Cash Flow Statement |
Class 12th Accountancy NCERT Concepts, Solutions and Extra Q & A
Accountancy - Not-for-Profit Organisation
1. Accounting For Not-For-Profit Organisation
This chapter focuses on the accounting practices for organizations whose primary objective is service to society rather than earning profit . These include schools, hospitals, clubs, and charitable institutions commonly found in India. It covers the preparation of financial statements unique to them: Receipt and Payment Account (summarizing cash transactions
2. Accounting For Partnership : Basic Concepts
This chapter introduces partnership firms in India, governed by the Indian Partnership Act, 1932. It discusses their features, advantages, disadvantages, and the importance of a Partnership Deed (written agreement). Accounting treatment for fundamental aspects like partners' capital accounts, distribution of profit/loss , interest on capital, interest on drawings, partners' salary/commission , and guarantee of profit is explained. The preparation of the Profit and Loss Appropriation Account and Partners' Capital/Current Accounts is covered, forming the basis of partnership accounting.
3. Reconstitution Of A Partnership Firm – Admission Of A Partner
This chapter deals with the reconstitution of a partnership firm when a new partner is admitted. This changes the existing partnership agreement. Concepts like calculating the new profit sharing ratio, the sacrificing ratio (by which old partners give up share), and the gaining ratio are explained. Accounting treatment for goodwill (e.g., premium method, valuation method), revaluation of assets and liabilities, distribution of accumulated profits and losses , and adjustment of partners' capitals to the new profit sharing ratio are covered, essential steps when a new partner joins an Indian firm.
4. Reconstitution Of A Partnership Firm – Retirement/Death Of A Partner
This chapter covers the reconstitution of a partnership firm when an existing partner retires or dies. This also leads to a change in the partnership agreement. Concepts like calculating the new profit sharing ratio (among remaining partners), gaining ratio (by which continuing partners gain share), and sacrificing ratio are explained. Accounting treatment for goodwill, revaluation of assets/liabilities, distribution of accumulated profits/losses , and calculation of the amount due to the retiring or deceased partner are detailed. How this amount is paid or transferred to the deceased partner's executor's account is also covered.
5. Dissolution Of Partnership Firm
This chapter deals with the dissolution of a partnership firm, which means the termination of the business of the firm. It discusses the different ways a firm can be dissolved (e.g., by agreement, compulsory dissolution, by court order). The process of winding up the firm's affairs is explained, involving the realization of assets (selling assets) and the payment of liabilities and expenses . The preparation of the Realisation Account to ascertain profit or loss on realization, partners' capital accounts, and cash/bank account to settle final balances is detailed.
Accountancy - Company Accounts and Analysis of Financial Statements
1. Accounting For Share Capital
This chapter introduces the accounting for Joint Stock Companies in India, governed by the Companies Act. It focuses on Share Capital, the capital contributed by shareholders. Concepts like types of shares (equity, preference), issue of shares for cash or consideration other than cash are discussed. Methods of issue at par, premium, and discount are explained. Accounting treatment for calls in arrears , calls in advance , forfeiture of shares (cancelling shares due to non-payment of calls), and reissue of forfeited shares is covered. This is fundamental for understanding company finance and reporting.
2. Issue And Redemption Of Debentures
This chapter introduces Debentures, which represent borrowed capital for a company. Debenture holders are creditors, not owners. Different types of debentures are discussed. The chapter covers the accounting treatment for the issue of debentures at par, premium, or discount , for cash or collateral security. It also discusses the terms of issue from the redemption point of view. Methods for redemption of debentures (repaying the borrowed amount), such as lump sum payment, payment by drawing lots, purchase in the open market, and creation of a Debenture Redemption Reserve (DRR) as per regulations, are explained.
3. Financial Statements Of A Company
This chapter focuses on the preparation of Financial Statements for companies in India, as mandated by the Companies Act and Accounting Standards (AS) issued by ICAI. The main financial statements are the Statement of Profit and Loss , showing the company's financial performance over a period, and the Balance Sheet, showing its financial position on a specific date. The prescribed format and required disclosures for these statements are discussed, ensuring uniformity and comparability in financial reporting for companies operating in India, providing crucial information to stakeholders.
4. Analysis Of Financial Statements
This chapter discusses the process of analyzing Financial Statements (Statement of P&L, Balance Sheet) to understand a company's financial health, performance, and prospects. It explains the objectives and significance of financial analysis for various users (management, investors, creditors). Different tools for analysis are introduced: Comparative Statements (analyzing trends over time), Common Size Statements (analyzing relative size of items), and Ratio Analysis (calculating relationships between different financial figures). These tools help in evaluating profitability, liquidity, solvency, and efficiency of a company's operations.
5. Accounting Ratios
This chapter focuses on Accounting Ratios, which express the relationship between two accounting figures, providing insights into a company's financial performance and position. Ratios are classified into various categories: Liquidity Ratios (measuring short-term solvency, e.g., Current Ratio = $\frac{\textsf{Current Assets}}{\textsf{Current Liabilities}}$), Solvency Ratios (measuring long-term solvency, e.g., Debt-Equity Ratio), Activity Ratios (measuring efficiency of asset usage, e.g., Inventory Turnover Ratio), and Profitability Ratios (measuring profitability, e.g., Gross Profit Ratio, Net Profit Ratio = $\frac{\textsf{Net Profit}}{\textsf{Revenue From Operations}} \times 100$, Return on Investment). Calculation and interpretation of these ratios are crucial for financial analysis of Indian companies.
6. Cash Flow Statement
This chapter covers the preparation of a Cash Flow Statement, a financial statement showing the inflows and outflows of cash and cash equivalents during a specific accounting period, as per Accounting Standard (AS) 3 (Revised) issued by ICAI. Cash flows are classified into three main activities: Operating Activities (cash generated from core business), Investing Activities (cash from acquiring/disposing long-term assets), and Financing Activities (cash from changes in equity and debt capital). Preparing this statement helps users understand the sources and uses of cash , crucial for evaluating a company's liquidity and solvency in India.